For many buyers, the first step into real estate ownership is purchasing a duplex or multi-family property, and living in one of the units.Known as owner-occupied rental housing, living in your own rental property can carry some distinct advantages. Not only can you use rental income to offset the amount you pay against the mortgage, there are several tax deductions and depreciation advantages to living in the same property you also rent.Living in your own rental property, of course, isn’t for everyone. Whether you will gain greater income from an investment property or an owner-occupied rental property ultimately depends on your individual circumstances. You should consult a financial consultant or tax advisor to discuss your bottom line. But here are several of the advantages to owner-occupied income properties to consider:Higher quality tenants. Many renters are particular about who they have to live next to, and having an owner-occupied building is reassuring. Owners are also selective about who they allow to live next door, thus attracting higher-quality tenants. It’s a beneficial dynamic that brings tenants who are willing to pay higher rent.Writing off expenses. Simply put, owners who occupy their rental properties are allowed to write-off their rental expenses against their rental income. Any expenses that apply to tenant-occupied units can be used as an advantage.Lower management and maintenance costs. Occupying your own rental property minimizes property management and maintenance costs that are typically handled by third parties, thus saving a certain percentage of gross income.The value of depreciation. Depreciation allows an owner to deduct a portion of the building’s cost, plus the cost of capital improvements, annually from the income of the building. While it is allowed only for the portion of the building used for rental purposes, it can sometimes shield rental income from taxation.The tax advantages. Along with depreciation tax, owners who live in their rental buildings can deduct the prorated part of the mortgage interest from their income. Property taxes can also be deducted.Selling the property. Owner-occupied housing is also shielded from property gains taxes (at certain limits) when sold, and those that have been lived in for certain time periods – usually more than a year – are subject to lower capital gains taxes than other investments. Through a tax-deferred exchange, owners who rent where they reside can combine both tax advantages and also defer gains on the sale of the property when they purchase another property within a limited time frame.